Economics can be used to predict lots of things. Anything correlated to underlying economic data can be predicted with economics. Literacy rates by country, per capita income, pace of poor rising to the middle class, and so on can be predicted with economics. But economics can do more. It can also predict things that seemingly aren’t related to economics, like the medal count of the Olympics. The predictions for 2014 were quite good. The reasons medal counts are predictable with economic data is that Olympic success is very much tied to economic success. Stronger nations field stronger teams, partially due to the financial support they’re able to provide.
But not all sports are created equal. For instance, economics cannot predict World Cup outcomes. Just look at the United States. We’ve always been a second or third tier team in the World Cup, despite having the largest economy in the world and the largest population of participating countries in the World Cup. China and India couldn’t even qualify. We should have been able to throw money at this problem a long time ago. But it doesn’t work. The US faces Ghana on Monday and economically speaking Ghana is about the size of Rhode Island. But the US is a long shot to win that game.
Economics is helpful in the medal count for Olympics partially because there are multiple competitions involved. It’s easier for a large country to be good at many things. But as you can see in the Olympics, some smaller countries may still dominate in one or two sports. Soccer is a completely different animal. Soccer isn’t simply a sport to the rest of the world, it’s a religion. So may countries that might make a poor showing in the Olympics can still be threats in the World Cup.
That may be one of the reasons that fans all over the world love soccer so much. Just about anyone can be great at it. What makes the World Cup special is that clearly no matter what the economic conditions of a country are, you still have a chance to win. Maybe that’s why it’s the beautiful game.
Check out this article to see some of the comical attempts to use economic data to predict World Cup outcomes.